Businesses Lack Formal CIO Succession Plans

Companies and government agencies have not implemented structured programs for finding new CIOs. That absence can have severe repercussions in a shrinking talent pool.

Less than 40 percent of businesses have a formal CIO succession plan in place, according to a new survey. That lack of structured continuity shines a brighter light on the issue of recruiting and grooming future IT leaders.

The survey, by IT products and services firm CDW, also found that businesses are far more likely to hire a new CIO from within. And despite suggestions of a shrinking skills market for IT professionals, more than two-thirds of the 1,063 IT leaders and workers polled said the talent pool is currently large enough.

CIO succession plans are clearly more popular among larger corporations; more than six in ten 10 businesses with more than 1,000 employees have a plan in place. The same goes for federal government agencies, 44 percent of which have a formal structure, versus 29 percent of state agencies and 20 percent of local administrations.

Businesses of all sizes favor hiring CIOs from their internal ranks. In the public sector, federal agencies choose from within higher than state or local agencies. The latter was the only group overall that tends to pick CIOs from outside the agency (51 percent) rather than inside (49 percent).

The CIO's role is changing, and future IT leaders need to be able to collaborate with C-level executives from day one, putting more emphasis on the need to train internally, said June Drewry, who retired earlier this year as CIO at insurer Chubb, after grooming her successor.

"You see so many companies going outside and bringing someone new in. They're just not willing to take the time to train internally, and that's a huge mistake, because there's going to be a lot of baby boomers out of the game soon, and there's going to be a real CIO shortage," Drewry said in an interview with CIO Insight last year. "Companies are going to have to be bringing people from below them into that position." (Click here to watch a video of Drewry discussing CIO succession planning.)

CIOs ranked attracting, developing and retaining top IT talent as their top priority for 2008, according to the Society for Information Management's annual survey. Businesses largely hailed their efforts to recruit executive-level IT pros, while very few labeled them ineffective. Government agencies weren't as enthusiastic: while almost half said they were successful, almost 30 percent called their efforts ineffective and a quarter were neutral.

CDW's survey also found that most companies overall feel they've been effective in developing mid-level staffers for top IT positions. Large (1,000 employees or more) and medium businesses (100-999 employees) were most satisfied with their efforts, with only 12 percent and 13 percent, respectively, calling their recruiting and retaining practices ineffective. Just over half of small companies (1-99 employees), though, characterized their efforts as neutral.

Government agencies haven't seen the same level of success, however: one-third of public sector organizations called their efforts ineffective, and a quarter said they were neutral.